Most of what you've written is fairly clear. I do have a couple follow up questions. Upon review of the employee's email to the employer, the employee state March 21, 2013 as the last day of employment:
"Please accept this as my official notice of resignation as of February 27, 2013. Unfortunately, having my hours reduced so dramatically, with so little notice, has left me with few options. However, I have been fortunate enough to secure a comparable position with someone else. My last day [at work] will be Thursday, March 21, 2013."
If it is of significance, the employee signed the at-will employment agreement on February 13, 2013, stating, among other things, that the employee would work approximately 20 hours per week and would be paid semi-monthly. Previously, the employee had been working with no contract since February 2012, at roughly 40 hours per week. The rate of hourly pay remained consistent with the rate of pay prior to entering into the agreement; however the hours, as you can see, were cut in half. That may or may not have any bearing in the matter. No, it is of no significance. An at will agreement that states that 20 hours a week is anticipated is not a guarantee or a contract of employment.
Also, please note that the employee will be due 20 hours paid vacation time per the employment contract signed. Then as of the date of the agreement to provide vacation time, the employee must be paid for the vacation time accrued in the interim---between the date vacation was promised and when termination occurs. Only a pro rata share of vacation need be paid though. Not what was perhaps promised for the whole year.
Given that the employee stated that the last day of employment would be March 21, 2013, here are my additional questions:
1. If the employer decided to pay the employee through March 21, 2013, that would cover approximately 1 1/2 pay periods. Employee would have received a semi-monthly paycheck on March 16th, for the period of March 1 - March 15, 2013; and would not have been paid again until April 1, for the period of March 16 - March 31, 2013.
Based on the above, I would propose the employer pay the employee full pay through March 15, 2013; and then the equivalent amount for the period of March 16 - March 21, 2013. Essentially, the total amount would be two full paychecks, or one month's salary at 20 hours per week. This would represent the first 2 weeks of March, plus the 3rd week of March, plus the 20 hours of paid vacation due. There is nothing wrong with proposing that. Again, though, it is more than is required under either federal employment law, or CA law.
Although I realize (I think) that the employer is NOT obligated to pay anything beyond the vacation pay due and time worked through February 27, 2013, it looks to me as though the simplest and cleanest way to wrap this up. Please let me know what you recommend. The benefit in doing this---paying the wages through the 21st, is that it eliminated the unemployment claim, and any possible increase in unemployment premium that the employer might have to pay if unemployment benefits were granted. It sounds fine to me.
You may reply back to me again, using the Reply to Expert link, if you have additional questions.
I wish you the best in your future,